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Saturday, May 10, 2003

Bush Trading

President Bush has just called for a US-Middle East Free Trade Agreement to be created within the next decade. Good grief. Other countries are still waiting on their agreement, and then there's the subject of the Doha round of trade negotiations. I have not been that worried about Bush's economic policy in general, but his trade policy is abominable. Dan Gelfand, talking about the proposed US-Australia agreement, says it up:

Up until now, the Bush administration hasn't exactly worshipped at the altar of free trade. It has instead favored the political gains from the protectionism, as with the economically unjustifiable steel tariffs. Only now, when it seems politically expedient, has an expansion of free trade been promised. Its track record of living up to trade promises, as with Chile, aren't exactly cause for optimism.

In his testimony to congress last month, Columbia trade economist Jagdish Bhagwati said:

With over 200 such bilaterals in place, and growing by the week as Asia follows in our footsteps now, we can confidently expect that they will grow to well over 400 by the end of the year. The great economists who warned us against preferences during the 1930s when competitive tariff-raising was creating fragmented markets worldwide would have been horrified to see that, in the name of free trade, we are now re-enacting such fragmented markets on a parallel scale, and feeling virtuous about it.

In a Tech Central Station article last month, Arnold Kling called for unilateral free trade with all countries. That, I think, is too much to hope for. If the US really wants to stick it to France, though, it could fight at the WTO for and end to agricultural subsidies and supports and for reform of the EU's Common Agricultural Policy. It would be indirect, though it would benefit everyone, including the French.